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rental yields

Understanding rental yields is necessary in determining whether an investment is really worth it. It’s the main way to gauge the value of a property investment, but with assured percentages for set time spans and variations across UK locations, it can be difficult to source out the best opportunities. To find out what it all really means and to suss out the best places for rental yields in the buy to let sector, take a look through these helpful pointers.

rental yields

3 Key Rental Yield Points

1. What is a Rental Yield?
2. What is a Good Rental Yield?
3. Highest Rental Yields UK

What is a Rental Yield?

A rental yield or return is the percentage return that an investor receives on a property through rent over a period of time. Rental income is expressed as a percentage of the property value, usually worked out in annual periods and paid to the investor quarterly. Rental returns can be assured for 1 year or more at the developer’s digression. Rental yields on property are the main way of monitoring the value of an investment.

It’s easy to work out rental yields when you know how. An example of how to calculate a property’s rental return is as follows: A property worth £100,000 that makes an annual rental income of £6,000 will assure a yield of 6%

What is a Rental Yield?

A rental yield or return is the percentage return that an investor receives on a property through rent over a period of time. Rental income is expressed as a percentage of the property value, usually worked out in annual periods and paid to the investor quarterly. Rental returns can be assured for 1 year or more at the developer’s digression. Rental yields on property are the main way of monitoring the value of an investment.

It’s easy to work out rental yields when you know how. An example of how to calculate a property’s rental return is as follows: A property worth £100,000 that makes an annual rental income of £6,000 will assure a yield of 6%.

What is a Good Yield?

The best rental yields are different for both residential and student properties. A minimum of 6% indicates a smart investment for residential property, whereas for student accommodation, a rental return of 8% is considered a strong rental yield. This high figure for student property is due to the reliability of tenants to provide a stable rental income. They tend to reside within the same accommodation for at least one academic year, giving investors a secure time span in which returns are assured.

what is a good rental yield

The best rental yields are different for both residential and student properties. A minimum of 6% indicates a smart investment for residential property, whereas for student accommodation, a rental return of 8% is considered a strong rental yield. This high figure for student property is due to the reliability of tenants to provide a stable rental income. They tend to reside within the same accommodation for at least one academic year, giving investors a secure time span in which returns are assured.

Highest Rental Yields UK

According to Totally Money’s Buy to Let Rental Yield Map for 2017/18, northern parts of the UK tend to rank highest for the best returns on investment.

An area demonstrating the best rental yields is Liverpool which boasts the highest yield of 12.63% in the L7 region. Five other Liverpool postcodes dominate the top 25 areas and all provide rental yields between the recommended 6-8%.

Manchester also tops the charts with two post codes yielding returns of over 7%. M6 in the Salford area is ranked number 14 with average returns of 8.25% in the top 25 spots whilst M14 comes in at number 19 with 7.98%

highest uk rental yields

A combination of high demand for both residential and student property in both of these areas is just one of the reasons why they feature so highly on Totally Money’s hotspot table. Liverpool and Manchester have multiple universities with thousands of students requiring accommodation, whilst their rising non-student populations ensure that tenant demand is high for residential properties. An undersupply of housing in both of these cities also contributes to the sky-high yields that echo towering demand in a lacking property market.

Liverpool and Manchester’s scores allude to the general consensus that buy to let yields are much higher in northern parts of the UK, and especially the north-west. Property is helping to narrow the gap between the north and the south as investors turn their attentions away from London to investigate more profitable opportunities in Northern Powerhouse regions.

Highest Rental Yields UK

According to Totally Money’s Buy to Let Rental Yield Map for 2017/18, northern parts of the UK tend to rank highest for the best returns on investment.
An area demonstrating the best rental yields is Liverpool which boasts the highest yield of 12.63% in the L7 region. Five other Liverpool postcodes dominate the top 25 areas and all provide rental yields between the recommended 6-8%.

Manchester also tops the charts with two post codes yielding returns of over 7%. M6 in the Salford area is ranked number 14 with average returns of 8.25% in the top 25 spots whilst M14 comes in at number 19 with 7.98%.

A combination of high demand for both residential and student property in both of these areas is just one of the reasons why they feature so highly on Totally Money’s hotspot table. Liverpool and Manchester have multiple universities with thousands of students requiring accommodation, whilst their rising non-student populations ensure that tenant demand is high for residential properties. An undersupply of housing in both of these cities also contributes to the sky-high yields that echo towering demand in a lacking property market.

Liverpool and Manchester’s scores allude to the general consensus that buy to let yields are much higher in northern parts of the UK, and especially the north-west. Property is helping to narrow the gap between the north and the south as investors turn their attentions away from London to investigate more profitable opportunities in Northern Powerhouse regions.

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